Liberty buys Sun and TDR's Pearl

Sun Capital- and TDR-backed insurer Pearl Group is to be acquired by Euronext-listed Liberty Acquisitions, a Cayman Islands-based investment business, in exchange for a £510m equity injection.

The reverse acquisition will see Pearl seek a listing on the London Stock Exchange and will cut the company's debt pile by £560m, boosting its balance sheet by more than £1bn.

Liberty will take a stake of about 60% in Pearl, while the company's lenders, which include Lloyds Group and RBS, will take a writedown of around £400m on the business' debt, in exchange for a 10.5% stake. The remainder of Pearl's debt will be refinanced on improved terms, including no amortisation payments for two years and reduced interest costs.Both Sun and TDR will see their stakes in the business cut to just under 30%.

The UK insurer has total debt of £3bn, much of it taken out when the company acquired Clive Cowdery's Resolution in a £5bn deal last year.

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